Just as the dollar’s earlier surge weighed on economic growth last year, the drop back in the exchange rate this year will provide a boost to growth over the next 12 months. The pick-up in global economic growth will also help. Real export growth has already begun to accelerate and the survey evidence points to a further pick-up in the second half of this year. Business investment, which was the other key weakness last year, has also experienced a turnaround this year. Admittedly, with the crude oil price stalling, the rebound in mining investment already appears to have run its course. But with labour market conditions now unusually tight, firms will be forced to invest more in capital equipment.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services